Compared to previous generations, new business owners are spoilt for choice when it comes to financing options for their business. Despite this, the vast majority of new businesses still go under in their first year. Stranger yet, most do so due to financial issues.

invoice discounting

Different types of financing institutions and their products each exist for a reason, and have their pros and cons. For brand new, relatively small-scale startups, alternative finance institutions like Fifo Capital offer uniquely well-adapted tools to quickly come up with capital for growth, and to regulate everyday cash flow issues. Unlike other financing options, they help to keep inexperienced borrowers away from risky loans, while quickly providing the funds businesses need to thrive.

High touch relationships

The most important benefit of working with a non-traditional finance institution is working with a dedicated representative, with whom an entrepreneur can build a long-term one to one relationship. While many larger institutions can only offer this kind of individual attention to very large clients, those like Fifo Capital that specialise in small businesses are designed to help provide individualised support and guidance.

This relationship based approach helps business owners by providing them with someone who can walk them through the various benefits of different financing options. That doesn’t just make it easier to make good financing decisions, it makes it possible for these financial institutions to safely invest in your business. By working closely with you, they can help to ensure your business’ success, and the success of their investment.

Transparent financing

In addition to having professional support that can help to determine the best financing options for your situation, alternative financing is also designed to offer a unique level of transparency. That means no surprise costs, and no chance of drowning in interest payments from predatory loans. In fact, some of the most common financing options don’t even work like regular loans.

Invoice financing allows a business to trade in an outstanding invoice for much of its value up front. The financial institution accepts the invoice, issues funds to you, and then collects payment from your client themselves. After the client pays, you receive the rest of the funds, less a predetermined fee. There are no repayments to make, and no interest to pay, making invoice financing one of the easiest and foolproof ways to come up with working capital.

Stock loans are also a very safe option for novice borrowers, because they’re secured against themselves. That means, if you are unable to make repayments, the lender can simply repossess the stock that the funds were used to purchase, leaving your business no worse for wear.

Of course, you can also go through an alternative finance institution to get what sounds like a regular business loan. At Fifo Capital, what makes these different from traditional loans is that they can be much smaller. Compared to a regular million dollar business loan, a $5,000 loan isn’t particularly difficult to manage, especially with the benefit of our expert representatives.

Working with such small amounts often isn’t profitable for large banks, but small businesses often only need small injections of capital, and aren’t prepared to manage a large debt burden regardless. Your financial representative can help you determine the amount you actually need, and ensure that it’s an ultimately beneficial move for your business.

Simple and fast approvals

Traditional loans operate on very different timescales than alternative finance. Getting a regular loan can take weeks, or even months. This is understandable considering the size of the loans these large institutions tend to issue, but that won’t help your business in the short term. At Fifo Capital, applications for invoice financing, business loans, and other services are processed in less than a day for returning customers, and within two days for new clients.

This allows business owners to respond to cash flow problems nearly instantly, which is especially important for startups that don’t have the benefit of experience to help them anticipate and control surprise costs. Additionally, it enables them to make time-sensitive purchases and take advantage of growth opportunities that wouldn’t otherwise be financially feasible for them.

Alternative finance products are designed to help entrepreneurs get the working capital they need to survive and thrive in an unpredictable and changing environment. Better yet, they provide that financial support in a way that’s specifically tailored to cater to the needs of small business owners, and to minimise the risks traditionally associated with borrowing by providing expert guidance. By understanding and using these tools, small businesses can gain greater financial flexibility in the short term, allowing them to compete, grow, and succeed in the long term.